Down goes the Dow

Japan is too busy watching the Oscars. They’re expecting a big night.

Geez. GS now thinks there will be no rate rise in March. Not 25 bps, none.

Wow, I totally did not see that coming. Never considered the angle of stress on banks being used as justification to ease off rate hikes.

I was actually hoping for one more dip to approximate lows of a few months ago to pick back up some shares I sold and now regret. I guess, not this time...

Likely takes the Dollar Index down, if so, that and lower interest rates will be good for EM bond CEFs.

Oh, the tangled web Biden has weaved. If this were business instead of politics, Biden, Powell, and Yellen would all have been fired a year ago.

Holy moley looks like the 2 year is trading down to something like 4.3% Sunday night. Unfrikken believable. The world changed this weekend. Huge profits in st bond funds tomorrow.

which is double plus good for me.

Now, what if you get a super hot CPI Tuesday? That would be something.

So that brings to mind the heads-up you gave months back about SJNK, the Short Term High Yield Bond Fund., ...and somebody listened.

You da boss!

Plus ca change !

"The quarter century following enactment of the Bank Charter Act showed
that the Act had not eliminated monetary disturbances, the government
having been compelled to suspend the Act in 1847, 1857 and 1866 to
prevent incipient crises from causing financial collapse. Indeed, it was
precisely the fear that liquidity might not be forthcoming that
precipitated increased demands for liquidity that the Act made it
impossible to accommodate. Suspending the Act was sufficient to end the
crises with limited intervention by the Bank. [check articles on the
crises of 1847, 1857 and 1866.]"

uneasymoney.com

On the Price Specie Flow Mechanism

David Glasner

I have been working on a paper tentatively titled “The Smithian and Humean Traditions in Monetary Theory.” One section of the paper is on the price-specie-flow mechanism, about which I …

Link:uneasymoney.com/2021/01/30/on-the-pric...

I think the view that high yield represents some kind of value is wrong. At this stage of the economic cycle junk is closer related to stocks and the economy than interest rates. I expect higher levels of default and junk to be one of the worst areas of the bond market over the next year. On the other hand, EM CEF bond funds will experience a renaissance with falling dollar, lower borrowing costs, and better cycle dynamics. A barbell approach to U.S. Government bonds with T-Bills and Long Treasuries, balancing the recession risk, what looks to be a poor earnings cycle, and a Fed trapped by their own machinations.

8.10% 30-Day Yield.

That is the draw, just as long as the NAV doesn't erode, and the belief was that it wouldn't unless a real recession materialized.

Yeah I am thinking my v. large position in VCSH, the short term corporate bond fund, and a smaller pile of short term treasuries, will do particularly well today. Junk bonds are basically stocks, and stocks are a problem right now. Certainly stock investors don't like confusion and surprises, and we have a lot of both of those right now.

Good old "Hot Bottom".

Stephen Gobie never did write his tell-all book, Capitol Offenses, but he still has a juicy story to tell. A male gigolo, in 1985 he placed an solicitous ad in Washington, D.C.'s weekly gay paper, the Washington Blade: "Exceptionally good-looking, personable, muscular athlete is available. Hot bottom plus large endowment equals a good time." That was all that U.S. Representative Barney Frank needed to hear. A powerful Democratic representative from Massachusetts and one of the few openly gay politicians at the time, Frank met with the hunky Gobie on April Fools' Day, 1985.At first their (paid-for) relationship was all sunshine and twittering birds. Gobie and Frank became inseparable friends, with benefits. Gobie joined Frank's team in the Congressional Softball League and, according to him, became "the star player." He attended a bill signing at the White House with Frank and they all but skipped through the Rose Garden.
But a darker underside was about to surface. Gobie lived loose. He had a felony past with convictions for cocaine possession, oral sodomy and "production of obscene items involving a juvenile." Gobie also had a habit of not paying his parking tickets.
Frank did what he could to extricate Gobie from his legal troubles. Using his congressional position, he successfully urged the sheriff to dismiss at least 33 parking tickets for Gobie. He also went on to hire Gobie as his personal aide, housekeeper, and driver. Gobie later explained the job was a "cover" concocted for his probation officers.
Meanwhile, Gobie had settled comfortably into the congressman's Georgetown brownstone. One night while lounging around the home, he was watching The Mayflower Madam on TV, a movie about an upscale madam. That story inspired him to become a pimp. Over the next few months, he ran a prostitution ring from the congressman's home. In 1987, the Washington Post broke the story.
An attempt to expel Frank from the House of Representatives failed on a vote of 390-38, but he was censured with a vote of 408-18. Happily, Frank's political career has survived and he still serves in the House of Representatives. PHIL BUSSE

Banks getting hit hard pre-market. CS default hit record, First Republic down 58%, Schwab down 6%. Sold some more shorts with good profits to leverage my bet. Big swings over night. Europe down 2%.

Never take a wooden nickel.

how about a gold coin? A lot of the pressure on gold is being lifted off....

interest rates falling

dollar falling

less financial stability/more fear

fed might not be able to keep fighting inflation.

I always lose on gold investments but have to say this looks like a good setup for gold.

Not sure if I'll buy any, though. I get scared out very easily because I don't see gold as an investment, just a 'greater fool' trade.

2 year below 4% now....was over 5% last week, I believe.

hoo boy

sounds like people are pulling money out of bank accounts and buying US treasuries, just for safety reasons.

And of course the fed will probably at least pause.

US stock futures diving now.....down 1% and falling fast. (8:45AM)